This archive report was first published on 25 August 2019.
August 25, 2019, marked a significant shift in the retail industry, with the rise of e-commerce becoming increasingly evident. The trend, which has been gaining momentum worldwide, has left many retail outlets in Kenya and Africa struggling to adapt.
According to a recent study published in the Harvard Business Review, 73% of shoppers combine both online clicks and store visits to make purchases. This omnichannel approach has proven to be successful for retailers such as Walmart and Target, two of the world's largest grocers.
However, the same trend has not been replicated in Africa, with local players struggling to keep up with the demands of e-commerce. One of the main reasons cited is the lack of infrastructure, including efficient logistics and warehousing systems, to support the 24/7 on-demand economy.
Another challenge faced by local players is the cash-on-delivery model, which leaves online retailers managing cash flow with a largely cash-based system. This is despite the upfront expenditure required to secure supplies.
As the author notes, 'An Amazon-like retailer isn't yet in Africa, and when they do evolve, we will all know it.' The author also highlights the importance of embracing e-commerce, citing the success of Boohoo, a UK-based online clothing retailer that has seen significant growth since its inception in 2006.
Ultimately, the lesson for retail outlets in Kenya and Africa is clear: to stay relevant and avoid future bankruptcy, they need to incorporate their customers' online convenience and embrace e-commerce.
